WeWork's scramble to recover from its failed attempt at an initial public offering continues.
The We Company halted all new leasing activity on Monday in an attempt to quickly stop the financial bleeding that drove investors away from its IPO, the Financial Times reported on Thursday. The news caused a panic among office landlords unsure of the status of ongoing negotiations, and the resulting deluge of phone calls led to WeWork's new leadership reversing course, FT reports.
The company will proceed with new leases, albeit at a much slower pace than what made it the largest private tenant in New York, London and Washington, D.C.
The turmoil hasn't stopped at The We Company since it filed its IPO prospectus in August. Harsh investor feedback over its finances, ownership structure and the management style of co-founder and CEO Adam Neumann resulted in the IPO's indefinite postponement and Neumann's removal as CEO.
Executives Artie Minson and Sebastian Gunningham rose to take over the company as co-CEOs this week, and have been forced to reckon with a rocky transition. The flip-flop on leasing strategy is just one of several decisions that have been made and reversed hours later in the past week, FT reports.
Certain decisions are less likely to be walked back, like Minson and Gunningham's house-clearing of staffers and executives, reportedly focused on those with the closest ties to Neumann. That exodus has included Neumann's wife, Rebekah, as well as the company's vice chairman, director of development and vice president of operations. The coworking giant also reportedly put multiple companies that it had acquired under Neumann up for sale, along with the $60M private jet he bought.
While office owners re-evaluate leasing strategies, as well as the value of buildings with WeWork as a tenant, competitors like Knotel, Industrious and Convene have used the high-profile floundering to highlight their differences in conversations with potential partners, The Wall Street Journal reports.